The Pomp Podcast - #1444 Anthony Pompliano & Phil Rosen | Why Is Bitcoin Crashing Right Now?!

Episode Date: November 26, 2024

Phil Rosen, the Co-Founder of Opening Bell Daily, and Anthony Pompliano, Author of ‘How To Live An Extraordinary Life’ and CEO of Professional Capital Management, discuss why bitcoin is crashing, MicroStrategy, risks, why no one can identify what could go wrong, a brand new theme appearing in the market, and why there always needs to be competition in the free market.  ======================= Bitkey, built by the team behind Square and Cash App, makes bitcoin self-custody easy and secure. Compare prices across exchanges, send and receive bitcoin, and track your wallet—all in one app. Named a Time Best Invention of 2024, Bitkey’s three-key system replaces seed phrases for simplicity. Get it now for $99—$51 off. Order at Amazon, Best Buy, or ⁠⁠bitkey.world⁠⁠. ======================= The future is being built today and the future of currency isn’t dollars, euros, pounds, or yen, it’s crypto. And Gemini thinks that’s a great thing. Because a future where money is decentralized, inclusive, and globally accessible, that’s a future that we are anxious to be a part of. Go where dollars won’t. With ⁠Gemini⁠. ======================= Pomp writes a daily letter to over 265,000+ investors about business, technology, and finance. He breaks down complex topics into easy-to-understand language while sharing opinions on various aspects of each industry. You can subscribe at https://pomp.substack.com/ ======================= View 10k+ open startup jobs: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://dreamstartupjob.com/⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Enroll in my Crypto Academy: https://www.thecryptoacademy.io/

What's up everyone? This is Anthony Pompliano. Many of you know me as Pomp. You're listening to the Pomp Podcast, which is my effort to find the most interesting people in the world and sit with them for hours while I ask questions in an effort to learn. So it would mean the world to me if you would subscribe to the show on your favorite audio platform, watch episodes on YouTube, and tell your friends and family about the podcast. My goal is to help millions learn from the world's most interesting people. So let's get into today's episode. What's going on, guys? Today, we've got a fascinating conversation with Phil Rosen. He is the co-founder and editor-in-chief of Opening Bell Daily. In this conversation, we talk about

what's going on with Bitcoin. Why is the price crashing? Should you be worried? We then get into MicroStrategy and what's going on with that business. What are the risks and why can no one identify how it could go wrong? And then we talk about MicroStrategy for X and this brand new theme that I'm seeing emerging in public markets, but also a couple of companies in the private market. The more people who start to understand this stuff and the more competition there is in the free market of ideas online, the better that we will get. So take a listen to today's episode and then go do some work. Go do some research and come back and let us know what are the answers to the questions that we pose in this episode. I'd love to learn from all of you. Here's my latest

conversation with Phil Rosen. Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only. Today's episode is brought to you by BitKey. They are the hardware wallet built for Bitcoin. They're made by the team behind Square and Cash App. BitKey makes securely managing your Bitcoin absurdly simple. BitKey is integrated with partners like Cash App, Coinbase, Robinhood,

and Blockchain.com, so you can easily compare prices across exchanges before you buy or sell. And their app works like the money apps you already use because simplicity is the best form of security. Send, receive, and track your wallet value over time, all in one place. Time Magazine named BitKey one of the best inventions of 2024. Their simple three-key approach to self-custody replaces complex features like seed phrases that make traditional wallets hard to use and easy to lose. Give the gift of simplified self-custody to the Bitcoin person in your life. And if that's you, get BitKey and sit back and relax while the sats stack. For a limited time, you can get BitKey for $99. That's $51 off the normal price. Get yours today

online at Amazon, Best Buy, or BitKey.world. That's B-I-T-K-E-Y.world. Go check out BitKey today and start securely managing your Bitcoin in an absurdly simple way. Today's episode is brought to you by Gemini. The future is being built today, and the future of currency isn't dollars, euros, pounds, or yen. It's crypto. And Gemini thinks that's a great thing, because a future where money is decentralized, inclusive, and globally accessible, that's a future that we are anxious to be a part of. Gemini teamed up with futurists, technologists, and designers, like award-winning artist Matt Griffin,

known for his illustrations for Dune, to craft a vision of the future with crypto at its core. The creative theme, Go Where Dollars Won't, emphasizes exploration, growth, and the crypto market's limitless potential. Whether it's going on that Martian safari to capture an unforgettable photo of a herd of woolly mammoths grazing the red planet, or using Bitcoin to pay for your Lyft pass to go strata skiing down the mountain peak of a breathtaking comet. Whatever adventures we'll be living, one thing is for sure. In a future this fantastic, the limits of traditional currency simply cannot keep up. Financial innovation will usher in this new frontier. And so go where dollars won't with Gemini. Go check them out at Gemini.com slash go where dollars won't. Again, go check it out at Gemini.com slash go where dollars won't. All right, Phil, what's the first thing you got?

So, of course, everyone is freaking out because Bitcoin has crashed to 92K, even though a week ago that was the all-time high. There's been some reports of profit-taking, and some people say, because everyone thinks we're getting to 100K, that means we're just not going to get there. What's your read on this? Everyone, relax. Prices are crashing to prices that haven't been seen since literally last week. As you just said, on November 1st, the price of Bitcoin was about $69,000.

And it went from $69,000 to $99,000 in like 21 days. And now we're back down to $92,000 and everyone is freaking out. One of my favorite things about Bitcoin is you can pick a price way out in the future. And at some point, although today it looks like will we ever get there, somebody will be freaking out because the price is crashing to $200,000. But that will be a headline some point in the future. And so I just think that emotion is so short-term

and people just look at hour by hour, day by day. They don't zoom out and look. The price of Bitcoin was $40,000 starting this year. When the ETFs got approved in January, it was $40,000. We're almost at 100,000. This is an incredible run for Bitcoin in 2024. But if you go on Twitter right now, you wouldn't think that. You would think the world is ending.

Bitcoin is over. People are done. Chill out. We've seen this story before. In Thanksgiving week of 2020, Bitcoin drew down about 15%, consolidated for about a week and a half, maybe two weeks. And then we went up and it was glorious. We broke through the 20,000 new all-time high level, and we were adding $1,000 a day.

I remember on December 25th, we hit $25,000. On December 26th, we hit $26,000. On December 27th, we hit $27,000. And on December 30th, we hit $30,000. And it was awesome. But everyone forgot a month before they thought the world was ending. And so this constant oscillation between good times and bad times and good times and bad times prove that the hardest thing to do in investing is just sit on your hands and wait. And I think

people who do that right now are going to be just fine. That's definitely true. One thing that is making people nervous, a lot of people are gaining Bitcoin exposure for the first time ever, right when it's at 100K. And you also have even more people that still don't have Bitcoin exposure, and they're still worried about the ETFs or maybe a proxy exposure like MicroStrategy. But you've been buying Bitcoin for six, seven years at this point. What gave you the early conviction? Because that was way before most people. When people start buying Bitcoin, they don't have conviction. They're trying to get rich. Just call it what it is. All these people who want to like morally, you know, look down on everyone else. 99% of people who buy Bitcoin for

the first time are buying it because they think they're going to get rich. And that is the beauty of Bitcoin is that is a decentralized organization. It's a decentralized network. There is no marketing team. Price is the marketing campaign. When price goes up, people talk about it. I get a lot more asks to go on CNBC, Bloomberg, Fox Business, and other TV shows during bull markets than bear markets. I have people who talk to me, barbers and taxi drivers and all the quintessential stuff during bull markets, not bear markets. Word of mouth spreads. You see it all over the news. More people come in, but they're not showing up because they think that they're buying a sovereign asset that's decentralized, that can't be censored or seized, and they're going to hold

this and give it to their grandchildren. They buy it because at $90,000, they think it's going to $100,000 or they think it's going to $110,000. They're going to get rich. And so these people come in for the money. But the beauty of Bitcoin is as you start to hold it, you then start to learn about it. You start to get indoctrinated into the whole community and you start to hear from people, oh, what is this idea of decentralization? Why is there a problem? Oh, the government's printing money. I didn't realize they were printing that much money. And they start to understand much more. And it goes from, I'm here to get rich

to you can never convince me to sell this. And that is ultimately where you build conviction. But conviction comes from education, comes from time invested, comes from testing yourself. If you think of all the things that you're convicted in, right, it comes from the fact that you have tested or you have tried whether it is true or not. And so if you go and you talk to someone who has really deep conviction in religion,

it's because during dark times, they turned to religion, right? But they tested themselves. If you go and you look at somebody, maybe on a team, like a sports team, and they have really deep conviction in that team, well, it's because that team's been through ups and downs. They've built bonds together. The military, they went through training together that was really hard. They tested themselves in combat, right?

But conviction comes from not just the good times, it comes from the bad times. And so, although a 10% drawdown is not a bad time, that helps to build conviction for somebody. And so, these are small ones. But imagine all the people who bought Bitcoin for the first time in 2020 and 2021. Those 50% of Bitcoin holders at one point came in during those two years. They just watched Bitcoin drop from 69,000 to 17 and go all the way back up to almost 100. You think they have conviction? They are way stronger hands today than they were when they first bought Bitcoin.

And so it's this idea of like you basically are building Bitcoiners. And when you think of all these price fluctuations as you are building those strong hands, you're building these people who have long term thinking you're building the quintessential Bitcoiner. Then all of a sudden you say, well, it's healthy. We need this. And so if you go back and you look in both the 2017 bull market and the 2021 bull market, even though prices went up hundreds of percent, we saw multiple, sometimes four to six, 30 plus percent drawdowns during that bull market. And so it's a volatile asset. It doesn't go up in a straight line. And so you're going to get these surges.

You're going to get some drawdowns, some consolidation, and it'll surge again. Just chill. Everything's going to be okay. and what we're watching is we're watching people build this conviction and the people who are selling bitcoin today i think will end up regretting it 10 years from now that's a solid bet and that tracks with your history when uh when you first started buying were you in the camp as well that was like i'm buying this to get rich everyone is in that camp i do not know a single person who has bought bitcoin and initially that was not the thing they were

interested in. It's human nature. And if you say that's not why you're buying it, you're lying because an economic asset that has a price attached to it, we're monkeys. We can't help ourselves. If we buy it at one price, we want to have it go up. So it's worth more in the future. It is only after you start to own Bitcoin. Can you truly start to understand it? And so if you can't understand it well until you own it, then you have to ask yourself, why are you buying it? It's because people want to get rich. And if you go back literally on the Bitcoin talk forums in the early days, people are

talking about one day, here's what could happen. One day here, it's all about, it's this today, but it's going to be that tomorrow. It's going to be worth more. And so I don't think that that's a bad thing. There's a lot of people who want to, again, kind of morally claim a high ground. I just think it's human nature. Why does anyone buy any financial asset? It's because they want to make money on it. It sounds actually very similar to stocks because people point to stocks and say,

this is a real business. There's cashflow, there's revenue. But most investors, even the most sophisticated ones, I would say, buy it because they just think it's going to go up. Of course. And I think that what the younger generation is showing is that as more and more people ask the question, how high can it go? Less people ask the question of how low can it go? Because the market has been manipulated to a point now where stocks cannot fall for prolonged periods of time.

I mean, think about it. We had a massive crash in 2022. Most people don't even remember it anymore. We're back to all-time highs, whatever. And so it is this weird dynamic where people will always point and they will say, look at the worst case, look at whatever. We are in a century-long bull market, a century-long bull market. There will be corrections along the way. There will be recessions.

But name one recession, name one depression that derailed the United States of America over the last century. You can't. they are all little blips on a chart because we're going up and to the right. And it's because the dollar is going down and to the right. And so all of this stuff doesn't matter. And I think that is the thing that people really lose sight of

is if you buy a stock, a single name stock, can it go down? Absolutely. Do companies go bankrupt? Absolutely. But if you invest in the stock market, it would be nearly impossible for the stock market not to go up over a 15 or 20 year period. Bitcoin, four years or longer you hold, throughout history, you're in profit.

And so the idea really comes down to, are you buying the asset because you're trying to predict what the price is going to be in a week or a month? Or are you buying the asset because you're to hold it for the long run. And I think that there's a lot of people who bought Bitcoin with a short time frame. And then when it drew down, they just said, screw it, I'm just going to hold it. And they got converted to long term holders. So all of that said, and I think, of course, Bitcoin long term, I think structurally, it's still very strong. And the bull case is so intact that there's nothing to even say otherwise, but this drawdown to 92 from 99,

what do you think like short-term is pulling it back? I dreamed of days like this. Bitcoin dropping to 92,000 is music to my ears, right? In the most simplistic way, the price is dropping because more people are selling than buying, obviously, right? Why are people selling? There are a lot of long-term holders

that are selling right now. This is healthy in a bull market. We see this quite often. If you go back and you look at all of the Bitcoin that has been sold since the FTX collapse in November of 2022, Checkmate, which is one of the best Bitcoin on-chain analysts in my mind, he pointed out that 21% of it, of that selling, has happened in the month of November of 2024. There's a lot of selling going on.

There's this massive sell wall between like 98,000 and 100,000. Great. but 90% of that selling is being eaten up by US ETFs. Then you have MicroStrategy. You have all these people who are in the market just buying away. I actually think this drawdown is muted compared to what it normally would have been

without the ETFs and without MicroStrategy buying up billions and billions of Bitcoin or billions of dollars of Bitcoin. And so drew down 9%. I told you in Thanksgiving week of 2020, it drew down 15%. So without microstrategy in the ETFs, maybe we would actually see a bigger drawdown. And so what that suggests is that the floor is actually much more structurally intact. And that to me would suggest the upside is even more interesting, right? Because you've got such

buying power that even in the drawdowns, they're muted, which would mean that when we're going the other direction, you have so much more momentum and so much more interest that it ends up working in your favor. And so the people selling right now, I think there's just a lot of profit taking, which is fine. Because guess what? If you think Bitcoin's going to 100K, maybe you should set your sell order for 98.5. You want to sell before it gets to 100 when everyone else is going to try to set theirs at 99 or 99.5. Yeah. And I've talked to investors who have those orders queued up for like 98 99 um dummies yeah um you you wrote something in your newsletter about how bitcoin tracks um m2 supply can you explain that a bit more m2 global money supply is um you know liquidity

and bitcoin more so than any asset in the world is sensitive to liquidity when liquidity expands bitcoin goes up when liquidity contracts bitcoin goes down and joe consorti recently pointed out that it's about a 70-day lag or so so if m2 starts expanding today 70 days from now bitcoin will start going up that's been true since about september of 2023 if you go and you look at sam callahan and lynn alden did a study and sam pointed out that bitcoin is the most sensitive asset to global liquidity. And so as you see that M2 increase, it's this great thing for Bitcoin. Now, what Joe points out is that actually over the last 30, 45 days, M2 global supply has been decreasing. And so he says, look, I'm not predicting a market crash, but if we do get a 20 or 25%

correction, then that would suggest that Bitcoin is still just following global money supply. but 20 or 25% drawdown would not be uncommon in a bull market. So the resounding message is we are in a Bitcoin bull market. The trend is up into the right. There is nothing that I am seeing that is suggesting the bull market is over. Even though people are freaking out, even though people feel like, oh my God, it didn't hit 100K. That's fine. We are in a Bitcoin bull market and things will continue. So just to touch on the M2 supply, does the equity market also track like with some type of lag? I don't know the exact number, but yeah, of course, if you have liquidity, right? I mean, look in 2020 and 2021, we increased liquidity in the market. All asset prices went up. The Fed came

out and they said, we're going to drain liquidity from the market. Asset prices went down. So there's a broad kind of correlation between these things. But I do think that there is a very important kind of understanding around Bitcoin in particular, is that US stocks, sure, they have some tie to global liquidity, but really US stocks are most impacted by US liquidity, right? It's all within the same economy. Bitcoin is a global asset. There are hundreds of millions of people that own Bitcoin outside of the United States. And so global liquidity and Bitcoin as a global asset are much more kind of closely intertwined

than I think global liquidity in US stocks. And so the more that you see, you know, kind of that this is a global phenomenon, it forces you to pay attention to what is China doing? What are other central banks doing? Because they have just as much impact on Bitcoin as maybe the Fed does. And so you've really got to have this kind of macro,

overlay, more so than maybe you would need in the US stock market, you really got to pay attention to what the Fed's doing. But what the ECB does, doesn't have a massive effect on the US stock market, because the Fed will override the ECB. So it intellectually is stimulating for a lot of people, because now you're playing a global game. You're not just playing a domestic one. Plus, it's like central banks won't be creating a reserve of US equities. and well uh correct but uh i do think that they at times have thought about buying stocks you probably should um it's better than bonds yeah um so i want to talk about micro strategy it's been one of the best performing stocks of the year it's done better than nvidia

and they're essentially buying billions of dollars of bitcoin by raising billions of dollars and borrowing money and selling its own stock to buy Bitcoin. And I think right now the market likes what it's seeing. It's obviously rewarding MicroStrategy stock. Can you talk about your view on the risk reward for a public company to go all in on one asset? Well, the reward is very obvious. It's worked so far. What I would say is when I look at what MicroStrategy is doing, it makes a lot of sense from a math standpoint. If I can sell essentially future equity at a higher price than my stock trades at today, which is really what the convertible debt is, sometimes at a 55% premium, and I can buy Bitcoin today with that

money, well, that sounds like a pretty good deal, right? It's because what you're basically doing is you're saying, hey, I'm going to invest in your company at $10, but I'm not going to actually get the equity at $10. I'm going to get it at 15 plus dollars a share. Well, why would I not do that? I should do that all day long, right? It's no different than Warren Buffett or anybody else saying, hey, if my stock's overvalued, I issue more shares. If my stock's undervalued, I buy back my shares. This is just a unique way of doing it. And it's a different use of the proceeds, Right? So I think that's first of all.

Now, the counterweight to that is there's a hell of a lot of people I see saying nothing can go wrong. I'm not in that camp. I couldn't sit here and tell you what can go wrong. But what I can tell you is that an alarm goes off in my head when I start seeing everyone saying nothing can go wrong. And so that's the hard part of the analysis is that a lot of really smart people that I talk with, they say, listen, I get why it's going up. I get why Saylor is doing what he's doing. All of that makes sense. It's very rational, both in terms of why people are buying it, why people are buying the bonds and why he's buying Bitcoin.

So you kind of like check all those boxes. The irrational thing is the blind belief that there is no risk. And so a lot of really smart investors that I've been talking with are saying, similar to me, the unknown is actually what scares me. We've never seen this before. We don't know what all the risks are. And it's okay at times to say, I think that there's always risk to anything. I can't figure out what the risk is today. but that doesn't mean sit it out completely or put all your money in completely maybe actually

the way to quote-unquote risk mitigate an unknown is some people will get a little bit of exposure but they will also de-risk by not putting 100 of their money right and so it becomes this very interesting dynamic of i think the reason why micro strategy is getting so much attention in the media because the price is going up so much naturally. The reason why microstrategy is getting so much conversation in private or behind closed doors is because this is the ultimate intellectual exercise. Who can identify the unknown risk? And I've got a couple of friends who have certain theories and stuff like that. Frankly, a lot of the theories that I've heard, I actually think that they're misplaced, which makes it even more, you know, kind of not so much confusing,

but like interesting is that people say, oh, well, there's a premium. And when the premium collapses, people could lose money. Maybe it's a premium. I actually think it's more so that people are assigning a valuation multiple to this quote unquote, like balance sheet revenue, which can't really get counted as true revenue but it is this accretive thing based on the way that they're fundraising which again is very clever and so you got to kind of tip your hat and say

I've never seen anyone figure this out before and so that's interesting but if you go and you ask someone what are the risks and they tell you zero I always think to myself it can't be zero because I can tell you really extreme risks

is if the United States banned Bitcoin. Do you think MicroStrategy stock would crater? Probably. I don't think that's going to happen, right? But that would be like a super extreme thing. So you're like, okay, at least we now have all common ground identified that there is a potential risk that we could identify,

even if we think the odds of it are 0.00001%. Okay. What else? And this is the exercise that I think a lot of really smart investors are going through. But the part that is so fascinating is that, again, I talked to a lot of, and some of these run very large, you know, macro hedge funds. Some people are inside the Bitcoin community. Nobody has been able to raise their hand and say with a high degree of confidence, I found the risk. And so you got to ask yourself, could there be such low risk that this really is a new thing that we're all underestimating? Maybe. But I think that's where the market is trying to figure this out. Is it simply so easy where you just sell your stock at a premium, you buy Bitcoin,

bitcoin goes up you sell your stock at a premium you buy bitcoin bitcoin goes up right like that's pretty interesting if that is what uh could happen it's very compelling i mean it it begs the question why wouldn't everyone do this um and a lot of the conversations i've been having with portfolio managers and all the big banks similar to what you're saying they cannot pinpoint the risk but i know almost no one is buying it for their clients. The people who I know that are buying Micro Strategy are almost entirely retail self-directed investors. And this makes me wonder, is this a similar to Bitcoin, a grassroots sort of momentum that's happening? I think a lot of people, when they hear retail's buying something and the like sophisticated guys

aren't, they think like, oh, like the dummies are buying it. I look at it the opposite. I look at it as the independent thinkers are buying it and the dummies are not buying it because there is no place where groupthink dominates more than on Wall Street. There is like a blob, a machine where they all just copy each other, right? You got an idea. Everyone else has the same idea. There is very little original thinking that happens inside of these organizations. Because also, people don't realize, there's a lot of top-down mandates. Like, go to the extreme example.

Financial advisors, in many cases, are given a model portfolio. And the bulk of their client's assets are going in a portfolio that the financial advisor didn't create. It got created at the home office. And maybe there's some tinkering, you know, at the edges or whatever. But like the bulk of it is a doctor or a lawyer or a person in the local community is giving their money to a financial advisor who really is just like a client, you know, representative and kind of a salesperson. They're smart. They understand finance, but they're in a system where the system is pushing down what they're supposed to be investing in. no different than if you walk into a local Chick-fil-A or Subway or whatever,

sure, each one may have, again, tinkered a little bit on around the edges, but like the home office told them, here's the system. And so you have to remember, it's not the person's fault. Who's the financial advisor. Like they are in a system and guess how systems work. You play within the system where you get fired. Right. So it's like, they almost have their hands tied behind their back. Whereas the individuals, the quote unquote retail investor is their money. They're not inside a system. They're free to think. They're free to evaluate. They're free to research. They're free to allocate. And so I do think that that has switched, but you see this all across society. I was laughing. I saw recently the Axios co-founder,

who I'm sure is a really nice guy, came out. He was yelling at a press dinner saying that just because you have a Twitter account and a check mark, you're not a journalist. And I wanted to respond and explain, I know a lot of journalists. I'm married to a journalist. I write every day. I know what goes into it. It's not some super secret thing where you got to go get a big degree for. Some of the best journalists in the world literally have a Twitter account, a check mark and they're doing the same work. And so it goes back to no one has a monopoly on the title of the media. There are people on Twitter who are full of shit and spreading conspiracy theories and all this nonsense and whatever.

There's a lot of people in the traditional media who do the same thing and they're full of shit. And so neither side is right or wrong. It's just now that the playing field has leveled a little bit because the tools are democratized. And so everyone is competing in a free market for the best ideas, the best stories, the best, whatever. So if you take that and you say, that's the media now go to the investing world, same thing. You now are getting a little bit more of a fair playing ground and you've had some leveling there. And now it's a free market of ideas, information, execution, et cetera. And so I think that this is happening across society is that the people who are the incumbent investors

or media or whatever, their whole careers have been based on we're in the ivory tower. Those people aren't, we have some advantage. But now that the tools have been given to the people, you get that level playing field. The people I respect the most and also the people who I think are winning

are the people who come from the incumbent side of things and they recognize the shift and they're starting to reposition themselves. Think of who has the biggest audiences in the world in terms of media. Half of them, give or take, are people from outside the media. Joe Rogan, Call Her Daddy, Alex Cooper. You've got somebody like a Patrick Bette David, a Sean Ryan. Those people aren't journalists, but they're all in the top 10 podcast.

But guess who else is up there? Tucker Carlson, Megyn Kelly, Candace Owens. right? So you have in the top 10 podcast, about half of the people were not journalists that became journalists. And you have about half of them that were journalists that now are adapting to this new world. The same thing is happening on the investing side. If you go and you take the best returns in a given year or in a given asset class, probably about half of them are people with traditional training who come out of an incumbent type organization, and they're adapting to the new world. And then about half of them are new. And they're saying, hey, I don't

have any of that stuff. I'm coming at it, you know, completely organic or native to this world. That's fascinating to me. And I think that Bitcoin really sits at the center of a lot of that. That's such a good analogy with media. I think a few years ago, you had all the independent investors going to Bitcoin and you had the people at Goldman Sachs saying, we would never give this to our clients. And then a few years later, that shift is taking place, just like in media how you know if you have the the platform of a newspaper or a website that gets millions of hits a day and then someone says i could make that outside without the ivory tower or the gatekeeping the people inside the ivory tower feel very threatened by that so then they

do everything they can to you know try to devalue whatever it is that's uh coming at them uh it's crazy it's it's pretty uh it also goes back to this idea of um intellectual humility is an essential skill going forward bitcoiners have had to learn this i think the hard way because everyone shows up to bitcoin and like it's the classic you know i'm new to bitcoin i'm here to fix it and those people just get run over and some of them realize that and adapt and change and get back on track. Some of them just get thrown to the side and get forgotten. But I do think that the same is true in the media or investing in general is that people are realizing, wait a second, I have to constantly keep learning. I have to constantly keep adapting. I mean,

think of Bitcoin. If you said to yourself five years ago, okay, I understand Bitcoin. I can tell you exactly what's going to happen. And you never updated your quote unquote model. So your mental model or an actual financial model. Well, now the ETFs are here. Completely new game. Micro strategy is here. Bitcoin miners are doing all kinds of things in the market. Like it's always evolving.

And so you have to have the intellectual humility of like a student, not the teacher. And I think that that is true in media. I think that's true in investing. The other thing I'll say about the connection between media and investing is pretty interesting. They're the same job. Find the truth.

The problem is that there's some people in the media, whether they are traditional media or new media, who they're not interested in the truth. They're interested in activism, and they end up usually falling to the wayside, right? Because people lose trust in them. Investing has the same thing. There are people who have what I call concrete brain, right? You want to have wet concrete because you can still mold it. You can still move it, et cetera.

Those are people who are able to find new assets like Bitcoin, who are able to allocate to things, who are able to be contrarian, who are able to find the new themes or the new companies to think about things that maybe they see things that are overvalued that other people think aren't, or they see things that are undervalued that other people don't, right? And they're constantly evolving. But then the concrete brain investor, 60-40 global portfolio, that was my training, obviously. What do you mean? you young dumb kids with this digital internet money can't possibly be valuable and cost you

money and so in media if you have a kind of flexible mind and a flexible approach and you have the intellectual humility there's reward at the end of that journey if you are inflexible then you actually get hit reputationally because people lose trust in investing the same thing Those with a flexible mind get the reward. Those with an inflexible mind lose money. And so it's this fascinating dynamic of both the media and investors are trying to do the same thing, which is get to truth. One allocates capital, the other allocates attention.

But ultimately, it's the same exact workload. I think it's what's unique about media is that the incentives are not so it's not as black and white as you make money or you don't make money because in media if you're a contrarian you could lose your job you could lose your friends you could get ostracized by all the other media companies and it's a very different game than just I'm gonna get you know X amount of percent returns more than the other investors. But I think that in investing, that has always been true that you can lose friends, money, all this stuff for a period of time, but ultimately there's an objective. There's a dollar, right?

There's a price. And if you end up being right, people will point back and say, you were right. People have watched the big short, losing, losing, losing, losing, bam, housing collapse, make a bunch of money. I'm a genius. I walk away, right? In media, to your point, it's not as clear, but there are a number of people who I think came out, let's say during 2020. And they said, this is wrong, or I believe X. And they were ostracized. They were attacked. They were all this stuff. It turns out they were right. The difference though, is how many people are willing to go back and say, you were right to the journalist? Very few versus there's always the price tag on from an investor standpoint, this person made X, you know, millions of dollars

or billions of dollars. It's pretty hard to argue with. Well, it's also the people that are willing to say, Hey, journalists, you were right. That's not other journalists. Other journalists will be the last people to admit something like that. Um, so before we, uh, get too far off, I want to ask you about soul strategies. And you wrote about this stock this week, um, or this company, they are doing something similar to MicroStrategy, but instead of buying Bitcoin, they're buying Solana. One of the big themes that I think is going to play out in 2025 and kind of years beyond is what I'm calling MicroStrategy for X. And so basically what MicroStrategy has identified is that you normally have two different levers in your business. You have revenue,

you can drive more revenue that can improve your business, or you can pull the lever of expenses and you can cut expenses and the best businesses drive more revenue and cut expenses at the same time. It makes them more efficient, more profitable, and they are a better business. MicroStrategy introduced the idea for non-real estate companies to use their balance sheet as a third lever. So the reason why I clarify non-real estate companies is because real estate businesses have been doing this forever. You have a balance sheet, it has assets, you can borrow against it, you can leverage it, you can do all these different things with your balance sheet And people understand that in real estate, drive revenue, cut cost, you have a balance

sheet as a third lever. For these other businesses, especially software businesses, no one's really thought of the balance sheet as that third lever you can pull. MicroStrategy did it. So naturally what happens? Somebody says, that MicroStrategy thing seems to work. So MetaPlanet in Japan says, why don't we do it in Japan? We could ARB the yen and we've got all kinds of advantages.

Let's do that. And then similar scientific says, well, why don't we just do exactly what he's doing? And they start to do it. And so you start to get people doing it. Then you see somebody like a Hut 8 or a Marathon or a Riot come out and say, why don't we leave some Bitcoin in our balance sheet?

Why don't we not sell our Bitcoin that we're mining? Why don't we borrow money or raise capital to buy more Bitcoin? So they start to do it. Then you have somebody like a DeFi Technologies that says, well, if we can put one asset like Bitcoin on our balance sheet, why don't we put a lot of these assets on our balance sheet? And they go and they put five, six, seven different assets on their balance sheet. And they say, hey, we're going to be more of an index for the whole industry. And then you have a company like Solstrategy that comes along and says, well, why don't we do Solana, MicroStrategy for Solana?

Let's put that on our balance sheet. And then let's go and let's buy validators, which are basically like the equivalent of Bitcoin mining, but for Solana. And let's drive cash flow to get more Solana on our balance sheet. And so the reason why I'm so interested in this is because I think this is a much broader theme. I am a shareholder or an advisor to DeFi Technologies, Huddate, and Sol Strategies. because I think that they are pioneering a brand new space in public markets that is going to marry old business models.

DeFi Technologies has ETPs. That's been around for a long time. HUD-8 has energy infrastructure. It's been around for a long time. Soul Strategies has the equivalent of the mining business, right? And these validators. That is a business that people understand

in terms of drying cash flows, et cetera. There's no different than like a gold miner, right? But those three companies are also pioneering using their balance sheet as a third lever, similar to MicroStrategy. And so today, maybe, you know, those three are the three I pay the most attention to because I'm helping them.

But maybe there's going to end up being a hundred or 500 of these companies. I, when I was talking about this yesterday, got a bunch of inbound of people with different variations around the world. It's interesting. And so my guess is that what we are watching is MicroStrategy is the pioneer

on balance sheet as a third lever. These other companies are starting to try to take that idea and customize it to whatever their business, their focus is. But we are at the dawn of MicroStrategy for X. and you're going to see a lot of people do this because people are realizing it works. It goes back to our earlier conversation though.

What are the risks? And so the obvious risk that no one talks about is just the prices go down. And so if you do micro strategy for X and you pick some shit coin or some meme coin that goes to zero, it's not going to work, right? But that's no different than if you say,

I'm going to start an e-commerce company. Everyone's always done e-commerce. And then you sell something that nobody wants. Your company's not going to work, right? So you can't just implement the strategy and pick any asset. You have to pick things that will last. And so I just think that we are watching the creation of this. I'm fascinated by it. I think a lot of value will get created here. Obviously, MicroStrategy has performed very, very well. Miners have done very well over this year. And so I do think that professional investors could take a page out of the retail playbook

and say, if I see it work one place, let me go find the other iterations of it. And I have to evaluate each one individually. Maybe they'll work, maybe they won't. Maybe they picked the right asset, maybe they didn't. Maybe their core business is good or bad or whatever. But there's a theme now. and it's no different than an investor showing up

and saying, I'm a marketplace investor. I look for marketplaces and I really understand them. It's a two-sided marketplace. I understand you got to get liquidity on one side, has to have a certain clearing price and a mechanism. And if you go talk to like a really good marketplace investor, I fall asleep as they talk about the nuanced detail.

But I also know I could never compete with them in marketplace investing. They are experts. They could tell you details of paid advertising spend and calculations and liquidity management, all these things to a degree that I literally might not even understand. But you flip it over and you say,

okay, let's go talk about this new sector that's being built. I want to be an expert on that. I want to understand that. Not there yet, but I'm trying really hard. I'm starting to understand it better. And so to me, that is where the sole strategies, DeFi technologies, HUD-8, so the world, et cetera, is that balance sheet as a third lever to pull. MicroStrategy was first.

They're doing it the biggest. They're kind of the category creator. But I think that this is one of those rare strategies that the fast followers are going to create a lot of value to. Usually, a category creator is the king, and that's it. And it's very hard. maybe you get an Uber Lyft, you know, you kind of get a number two, but it's not that there's 15 or 20. Here, because of the nuance of the strategy, any business in the world can do this. Even a small business in the private market can do it. And it's not necessarily competitive with each

other. And so I think that that allows from an investment standpoint, a lot of runway to go and find these as they pop up around the world and say, hey, look, I want to make sure that, you know, at the forefront of this. That's fascinating. And it's great how tapped in you are to those smaller kind of vanguards. On that note, thank you for having me. Thanks for doing this.